Those situations in which customers seek assurances beyond the standard contract tend to involve the addition of
performance-related clauses, he notes. For example, a customer who experienced issues with a previous managed
services provider may ask for the right to terminate the contact without penalty if the contractor breaches its SLA
for three consecutive months.
Analysis: How the Cloud Can Solve Security Problems
In a handful of cases, customers will ask Tenzing to include a clause stating that it will conduct annual SAS 70
and ISO 27001 audits for the duration of the contract. Fougere says the company conducts such audits as a matter of
Due Diligence with a SaaS Contract Worth the Effort
Customers finding limited room to negotiate can take their deliberations upstream-that is, investigate SaaS
contracts upfront and determine which one best fits the organization's needs.
The whole premise of SaaS is to take advantage of a...standardized set of services and, as a result, [vendors]
aren't going to be that flexible to individual contract demands," Kaplan says. As a consequence, Kaplan suggests
that prospective SaaS buyers shop around, examining standard contract terms across multiple vendors within a given
Analysis: What You May Miss If You Don't Read a SaaS Contract
Smaller SaaS providers require additional due diligence, since a large company could acquire such a vendor and
change its product direction, D'sa says. "Unless they are a commodity service that can be replaced very easily, it
becomes a warning flag to review in much more detail."
In addition, customers should also consider how tightly to link such providers with in-house systems. SaaS
offerings that are not closely integrated with a customer's code or business process may be more readily replaced
if the service doesn't work out or the customer finds another vendor with a more compelling feature set, D'sa
Tools for data export/import and migration become a key issue during vendor-switching decisions, he adds, and
need to be taken into consideration upfront if there is a possibility of such events.